Radio Ga Ga

US record labels and terrestrial radio have been battling for years now about royalty payments.

When satellite radio struck a deal with the record industry a few years ago to pay royalties to the owners of master recordings in addition to the performance royalties paid to music publishers, the clock started ticking. It was only a matter of time before radio broadcasters would be forced to pony up.

The broadcasters, represented by the National Association of Broadcasters (NAB), have come up with the perfect trade-off for having to pay for their content. Simple solution, really. Just force mobile phone manufacturers to install FM radios in every phone sold in the US–and by Congressional mandate, no less.

Now clearly I don’t have to point out how hopelessly idiotic this idea is.

The other party in the negotiations, musicFirst, a group representing labels and artists backed by the RIAA, jumped up and said, “Great idea. All for it”. Of course, they’d agree to anything that would get them closer to cashing royalty cheques. After all, it’s no skin off their nose. It’s sort of like watching a couple of old elephants mating; awkward, cumbersome and messy.

You have to admit that these geniuses came up with exactly what consumers want; bullshit, ad-laden radio that they don’t listen to anyway that will just drain precious battery life from your already energy-taxed smartphone. Besides, why the hell would anybody listen to FM radio when they can get Pandora? But maybe this idea will actually force people to listen to their morning zookeepers. Right.

And of course, who do you think will ultimately pay for the millions of unwanted and unused mandated FM radio chips?

Marty Machowsky, a spokesman for musicFirst, said FM radio on cell phones “..would give consumers more ways to listen to and enjoy music.” Exactly. A choice that consumers don’t remotely want.

The NAB said such a requirement would provide a valuable public service, particularly in emergencies, when consumers often tune into local stations seeking critical public safety information. Clearly nobody at the NAB owns an iPhone.

In thinking about this, I realised that Mitch Bainwol, CEO of the RIAA, is no dummy. Mitch is a smart and crafty political operative (and a good guy, by the way, who owns an iPhone). I have to think that Mitch, in his heart of hearts, knows that this is a bullshit idea and is letting the NAB float this proposal knowing that it would never get through Congress in a million years.

Gary Shapiro, head of the powerful Consumers Electronics Association, is one of the best and smartest Beltway insiders there is. The CEA and the CES are big and powerful, thanks to Shapiro’s savvy, and he doesn’t take any shit from anybody in DC. I’ve seen him in action at Congressional hearings and it’s a thing of beauty. Love this guy. Mitch has to know that Gary would never let this fly.

And let’s not forget about the CTIA, whose CEO Steve Largent is no pushover either.

The bottom line is that this is simply a political hot air balloon. The RIAA knows this will go nowhere, so why not agree to it, leaving the NAB with nowhere to go once it’s shot down? The radio broadcasters will be forced to write the cheques they should have been writing for the last 50 fucking years without shoving their shit product down the throats of US consumers.

In the meantime, the press and the blogosphere will go crazy slamming the proposal and bozo Congressmen will get astroturfed with emails and faxes.

So I have to give Mitch credit for once again taking a PR hit for the team (an historically ungrateful team, I might add). But at $2 million a year (Mitch’s salary), it hurts so good.

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Posted by Wayne Rosso
on Aug 20 2010. Filed under Digital, featured, Marketing.
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